Selva Kumar Nadar, the owner of Ashtavinayak Investment who promised exorbitant returns to his clients and lured them into investing in his firm an estimated Rs 300 crore by taking personal loans from various banks and has since absconded, has left a trail of suffering in the city of Pune. Nadar’s over 200 defrauded clients are struggling to cope with the financial mess that they have landed into after the 39-year-old former banker fled the city with his wife and son in the last week of February.
Speaking to The Indian Express, Nadar’s clients have shared their predicament with many pointing out that the EMI sum that they are supposed to pay each month is several times their salaries.
Prabhat Ranjan, Income: Rs 1.05 lakh/month until December 2022, Unemployed now. Loan Amount: Rs 88 lakh. EMI Due: Rs 1.99 lakh/month
Prabhat Ranjan, 46, an IT professional who stays in Kharadi, received a call from telemarketers of Ashtavinayak Investment in July 2021. They offered to help him get a low-interest transfer of an existing loan.
A senior executive of the firm who visited Ranjan to initiate the loan transfer process sold him another scheme by which he could get a loan of a much higher amount and could also make a profitable investment that will give him lucrative results.
“He told me that the company will use my profile to take loans from various banks. I will be given a portion of that amount to meet my needs and I will repay that amount as 5 per cent interest. The rest of the amount will remain invested with Ashtavinayak which will pay the EMIs for that amount. They will also pay me 5 per cent returns of the amount invested after 2.5 years and another 5 per cent at the end of 5 years,” said Ranjan who is a father to two kids. He was also promised income support for three to six months at zero per cent interest in case of job loss and similar financial support to cope with medical emergencies.
The money, Ranjan was told, will be invested by the firm in any of the company’s several interests – commodities trade, capital markets, export-import, hostel operations, or gold business.
In a few days after he shared his documents with the executive, Rs 88 lakh was in his account through personal loans in six different banks.
“The process happened in a flash. I was surprised how they processed the loan in six different banks as they had collected only one set of documents. Of the six, only one bank did any kind of physical verification. The disbursals happened within two days of banks receiving the applications. I was alarmed that they simultaneously processed the loans in so many banks but they calmed me down by using their tactics,” said Ranjan.
With the Rs 88 lakh in loans, he was required to pay Rs 1.99 lakh in EMIs per month of which Rs 17,000 was for Rs 10 lakh that he used himself and the rest Rs 1.82 lakh used to be deposited by Ashtavinayak in his account in the last week of the previous month.
He used to get the deposits of funds for EMIs for Ashtavinayak, with slight delays sometimes, until October 2022, when they became erratic. “In October 2022, the firm wasn’t able to pay the agreed-upon amounts. I was paid partially. When enquired, Selva told us that there were some issues and that he would straighten them up. There were issues in the next month and the next one. He requested me to pay from my own pocket. Meanwhile, I lost my job in December 2022. This made things worse. I was desperate to close the loans due to the loss of income. They were assuaging me by saying something or the other,” said Ranjan.
Selva Kumar Nadar’s office at the 8th floor of Nucleus Mall in Pune (Express photo by Atikh Rashid)
All hell broke loose when he fled in February 2023, landing Ranjan and about 200 others in a deep financial mess.
37-year-old IT professional and his wife, residents of NIBM Annexe. Income: Rs 2 lakh/month collectively. Loan Amount: Rs 1.1 crore. EMI: Rs 2.5 lakh/month
In November 2020, a 37-year-old IT professional (who requested not to be named) who stays in NIBM Annexe was looking for a loan to build a house on a piece of land that he had recently bought. He had made a few enquiries with non-banking financial institutions, which offer loans at considerably higher interest rates, as he was facing difficulties to get loans from banks due to some technical issues. Picking up on his queries with NBFCs, he received a call from Ashtavinayak Investment.
“9.5 to 10 per cent was the prevailing market interest rate for loans. Ashtavinayak telemarketing executive told me that they were offering loans at 6 per cent. ‘How is that possible?’ I asked them. The next day their man came home to explain how that was possible and sold me another scheme,” said the IT professional.
The Ashtavinayak executive collected a set of documents from this potential investor and asked him to visit the firm’s office in Nucleus Mall to get things clarified.
“But before I could do that, I started receiving calls and messages from banks that they have received loan applications. Within two days, I had in my accounts Rs 1.10 crore through five loans jointly in my and my wife’s names,” said the IT professional. He said that he went to the Ashtavinayak Investment’s office to seek clarification as the amount was considerably higher than what was discussed. “Selva has great convincing power. He told me that a higher amount meant that I will receive higher returns and I will be able to pre-pay the loan that I had taken for the construction,” said the IT professional. He ended up keeping Rs 30 lakh from the disbursed amount for his use and handed over Rs 80 lakh to Ashtavinayak for investment.
From December 2020 to October 2022, the EMI amounts were paid to his account regularly. In the meantime, Nadar launched a scheme of using the credit cards of the clients and paying them 1.5 per cent for the amounts used. “I gave them four credit cards with a cumulative limit of Rs 13 lakh. At that time, I used to trust them,” said the professional.
When things began to go awry, starting from October 2022, the IT professional partially paid several EMIs and also cleared the pending bills on his credit card as Ashtavinayak was unable to pay but Nadar would promise that he would clear the pending bills and will also make up for the trouble the clients went through.
But, like other clients, the IT professional and his wife were left in the lurch when Nadar locked his home in Kumar Prithvi housing society and Kondhwa and disappeared last month. Apart from the EMI of Rs 2.5 lakh per annum, the family has several other private lenders to pay and credit card dues to clear.
‘Jail us, we have no money!’
Most of the 200 investors, who have approached the Economic Offences Wing (EOW) of Pune police, have similar stories. They have formed WhatsApp groups to remain in contact with each other and have also hired a lawyer to provide legal assistance.
“In most cases, the monthly EMIs that they are required to pay is much higher than their monthly income,” assistant police inspector Mayur Vairagkar of EOW said.
As per the defrauded investors, the banks and their recovery agents have started harassing them with calls and personal visits. “Many among us have developed health issues such as hypertension and insomnia because of the tension, harassment of the banks, and the uncertainty about the future. Due to relentless badgering and intimidations of the recovery agents, many have started telling them that we were ready to go to jail,” said Ranjan.
